British online money transfer service TransferWise has received regulatory approval to provide retail investment products and services in Britain.
The permission granted by the Financial Conduct Authority (FCA) makes TransferWise the latest financial technology startup to branch out into offering a wider range of financial products.
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The company said it expects to launch its first investing feature in the next 12 months. Though the firm is starting with the U.K., it hopes to also roll the product out internationally later down the line.
“Borderless” multi-currency accounts
The startup offers multi-currency accounts which allow customers to store money in 54 different currencies. The additional investment features will enable customers to generate potential returns on those deposits.
TransferWise supports more than 750 currency routes across the world including GBP, USD, EUR, AUD and CAD, and provides multi-currency accounts.
The company said UK investment accounts of up to £85,000 will be protected under the Financial Services Compensation scheme.
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By GlobalDataIn spite of the coronavirus crisis, TransferWise still expects to turn an annual profit in its 2020 accounts. The firm has been profitable for three years running, but a big selling point of its multi-currency debit card is the ability to convert to local currencies when traveling.
“A different approach to traditional banks”
Founded in January 2011 by Estonians Kristo Käärmann and Taavet Hinrikus, the firm is based in London. The startup offers cheaper alternatives to bank transfers around the world.
TransferWise says it’s racked up 8 million users globally and processes £4 billion worth of transactions each month. Its investors include Andreessen Horowitz, Richard Branson and Peter Thiel’s Valar Ventures.
Käärmann said the problem the platform’s users have had lately is finding a way to make a return on their cash. He added that TransferWise wanted to take a different approach to traditional banks, which lend out customer deposits and charge interest.
